Chile: the balanced view : a recopilation of articles about the Allende years and after

contributed to the dissatisfaction of the truckers whose strikes in October 1972 and July-September 1973 initiated ,the chain of events which led to Allende's downfall. In addition, the shift away from American suppliers undoubtedly caused serious dislocations in areas like the copper industry which had relied exclusively Eln American sources for machinery and parts. But until the end the Allende government was able by clever footwork to continue to secure the foreign assistance needed in everincreasing amounts to cover food imports as domestic food production dropped. To be sure, U.S. policy is open to criticism, either as too harsh-or, to a few, as too soft. If the Nixon administration had set out to promote the overthrow of the Allende government, it could have taken much more vigorous measures than it actually undertook-including embargoes on spare parts and on Chilean imports as well as a cutoff of the considerable assistance in the pipeline. Instead, in an effort to pressure Chile into a settlement with the copper companies and, more generally, to deter further cases of expropriation of American property without compensation, it chose the January 1972 policy statement against new econom ic aid to expropriati ng countries. That statement was in accord with the intent of the U.S. Congress as expressed for over a decade in the Hickenlooper Amendment on U.S. foreign assistance and in the González Amendment concerning multilateral aid which was reported out of a House committee almost simultaneously with its issuance. Given the ineffectiveness of these policies in deterring nationalizations in the Third World and the problems that they create for U.S. relations with economic nationalists in many countries, onemay indeed question the advisability of linking U.S. foreign policy so explicitly to the defense of the economic interest of overseas investors. The policies pursued in the furtherance of that objective, however, do not seem to have cúntributed in any significant way to, or to have been aimed specifically at, the overthrow of the Allende government. One can also criticize a certain disingenuousness in the consiant references to credit-worthiness at a time when Chile was still paying her debts. (Even 'after the debt payment moratorium, payments continued to be made in 1972, though not in 1973, to the multilateral lending organizátions.) As the Export-Import decision demonstrated, and the January 1972 policy statement confirmed, the U.S. government's concern, which it was not always willing to admit openly, was to assist U.S. companies to secure compensation when their assets were expropriated. Additional criticism may be leveled at the World Bank and the Inter-American Oeve– lopment Bank for their apparent subordination to American policies. The World Bank rejects this criticism, arguing that it was following its own long-established policies and citing the credit-risk argument again. It maintains that in 1973 it was in the process of approving a $5 million loan for pre-investment studies in Chile, but the indefinite postpo– nement of the submission of the 1971 fruit and vineyard loan seems closely related to the copper compensation question. In the case ofthe 10B, the factthat no new loanswere made to Chile after the copper nationalization (although some were moving, slowly, toward the final stages for submission to a vote) seems clearly related to American opposition. The basic causes of Allende's overthrow lie elsewhere, however. They were, in my judgment: 1. 0 eventual runaway inflation (323 percent between July 1972 and July 1973) caused not by lack of foreign assistance but by a domestic economic pÓlicy, initiated well before the steps taken by the Nixon administration in the latter part of 1971, which relied on massive printing of moneyto solve all economic problems;(14) 2. 0 Allende's ideologically motivated policy of intensification of the class struggle, which was more effective in solidifying middle and lower middle class opposition than in broadening his worker and peasant support; 3. 0 an Allende administration policy of circumventing the law through legal "Ioopholes" or nonenforcement of its provisions-a policy which was opposed by the Congress and a majority of the voters (56 percent in the March 1973 congressional (14)The money supply increased by over 1,000 percent during the Allende administration, and in 1973 52 percent 01 the national budget and even greatei Bmounts to cover losses in the national ized industries were linanced by currency emissions. 120